With COVID-19 having restructured the way the Ghanaian economy operates, it was only to be expected that SCANCOM which operates the MTN network in Ghana would improve its profitability immensely.
This has shown up vividly in the company’s financial performance results for the 2021 financial year in the form of bigger assets and even better utilization of those assets.
Underlying all these has been phenomenal growth in the number of subscribers. Mobile voice telephony growth has been inevitably on the decline for several years now and this trend has continued into 2021.
However, the growth in subscriber numbers, product enhancements, and innovations around customer value management supported growth involving telephone by 4.9 percent year on year.
Accordingly, the contribution of the service revenue declined from 41.8 percent to 31 percent Year on Year in favor of increased contribution from data and Mobile Money.
With data revenue increasing by 56.3 percent Year on Year to GH¢2,769 million. This resulted from increased tariff by up 54.9 percent growth from commercial intervention improvements.
MoMo also proved to be a major source of net income growth. Active growth in MoMo subscribership achieved a growth of 38 percent in 2021, with merchants expanding by some 29.9 percent and agents being expanded by a further 18.7 percent.
Growth in MoMo advanced services such as micro-retail payments and international remittances also paid a significant part.
Altogether total revenue for 2021 amounted to GH¢7,723 billion, which represented a 28 percent increase over the GH 6,033 billion generated in 2020.
As is MTN‘s tradition, service revenues accounted for an overwhelming majority of total revenue, generating GH¢7,725 million.
Importantly, earnings before interest, depreciation, and amortization further communicated improvements in financial positioning, which climbed from GHc 4,249,384 million.
This raised the margin significantly from 52.7 percent to 55 percent to 3,178,181 in the previous year.
There are two keys to MTN’s success one is its unparalleled capital expenditure. In 2021 total CAPEX amounted to GHc 1485 million which amounts to two-thirds of the company’s taxable profits.
The company successfully implemented its investment plans with a total CAPEX of GH¢1485billion supporting infrastructure modernization, expansion of 4Gpopulation coverage to over 90.6%.
Total CAPEX comprised property, plants, and equipment to the tune of GHc1.215 billion; intangible assets to the tune of GHc 47.3 million; Right-of-Way assessment totaling GH¢1.485billion.
Earnings per share
Ultimately though MTN Ghana’s shareholder document for, them 2021 churning pre-tax profits of GHc2,848.638million plowing diluted basic earnings per share on the fierce contested Ghana Stock Exchange the national fiscal GSE where stock attract some of the highest basic earnings per shares on stock marketed.
Earnings per share 2020 experienced a strong increase in a proposed final dividend of GHc0.085 per share. But capital gains although on the back of a GHc0.03 interim dividend per share paid, totaling dividends added up to GHc 0.115. Shareholders have great prospects for capital gains too.
Although MTN’s share price has fallen marginally for the year to date to fate this is simply because of the freeze on the share price in place when it went ex-dividend.
Now that a dividend has been announced expect a strong is in the company’s share price Indeed it is instructive that MTN has been the most traded equity on the GSE since it was listed in 2018.